Practice Units


As part of LB&I's knowledge management efforts, Practice Units are developed through internal collaboration and serve as both job aids and training materials on tax issues. For example, Practice Units provide IRS staff with explanations of general tax concepts as well as information about a specific type of transaction. Practice Units will continue to evolve as the compliance environment changes and new insights and experiences are contributed. Please visit this site periodically for new and updated Practice Units which are shared below.

To provide feedback on a specific Practice Unit, please send an email to LBI Practice Unit Public Feedback and specify the Practice Unit's name and Document Control Number (DCN), which are both listed on the Practice Unit's cover page. Please do not reference a specific individual or entity in your email as comments may be subject to future release. The IRS does not commit to respond to suggestions or comments.

Practice Units are available in Adobe PDF and must be viewed with the Acrobat Reader.

Note: Practice Units are not official pronouncements of law or directives and cannot be used, cited or relied upon as such. Practice Units provide a general discussion of a concept, process or transaction and are a means for collaborating and sharing knowledge among IRS employees. Practice Units may not contain a comprehensive discussion of all pertinent issues, law or the IRS's interpretation of current law. Practice Units do not limit an IRS examiner's ability to use other approaches when examining issues. Practice Units and any non-precedential material (e.g., a private letter ruling, determination letter, or Chief Counsel advice) that may be referenced in a Practice Unit may not be used or cited as precedent. References to third party service providers and documents, like news or journal articles, are for informational purposes only and do not constitute an endorsement of any vendor, document, or the services or views offered by such third party.


To find years 2019 to 2014 see, Practice Units - 2019 to 2014.


Date Title Size
06-07-2024 Lower of Cost or Market (LCM)PDF 379KB
02-21-2024 How to Allocate and Apportion Research and Experimental (R&E) Expenses for Tax Years Beginning Before 1/1/2020PDF 285KB


Date Title Size
11-30-2023 Taxation of Beneficiary of a Foreign Non-Grantor TrustPDF 360KB
09-29-2023 Foreign Tax Credit – Categorization of Income and Taxes Into Proper BasketPDF 465KB
07-12-2023 Expatriation On or After June 17, 2008 – Mark-to-Market (MTM) Tax RegimePDF 368KB
05-16-2023 Interest Expense Limitation on Related Foreign Party Loans Under IRC 267(a)(3)PDF 719KB
05-16-2023 Dividend Distribution with a Debt IssuancePDF 235KB
05-16-2023 Interest Expense Limitation Under IRC 163(j) for Controlled Foreign Corporations Post-TCJAPDF 406KB
01-17-2023 Identifying and Handling Claims for Changes in Accounting MethodsPDF 379KB
01-17-2023 Accounting Method BasicPDF 251KB


Date Title Size
10-18-2022 FinCEN Form 114 –Report of Foreign Bank and Financial Accounts (FBAR)PDF 254KB
08-29-2022 IRC 958 Rules for Determining Stock OwnershipPDF 626KB
07-25-2022 Allowance of Deductions and Credits on 1120-F Delinquent ReturnsPDF 273KB
06-24-2022 IRC 179D Energy Efficient Commercial Buildings DeductionPDF 365KB
04-25-2022 Country-by-Country (CbC) Report in the Transfer Pricing Risk Analysis ProcessPDF 499KB
03-31-2022 Deferred Compensation Received by Nonresident Alien IndividualsPDF 279KB
03-22-2022 Erroneous Claim for Refund or Credit PenaltyPDF 241KB
01-04-2022 Section 245A Dividend Received Deduction OverviewPDF 310KB


Date Title Size
12-14-2021 IRC 59A Base Erosion Anti-Abuse Tax OverviewPDF 762KB
12-14-2021 Interest on Deferred Tax LiabilityPDF 434KB
12-14-2021 Examining Treaty Exemptions of Income — NRA Students, Trainees, Teachers and ResearchersPDF 471KB
12-14-2021 Tax Shelter Promoter Investigations Under IRC 6700PDF 368KB
12-14-2021 Flow-Through Entities Effects on FTCPDF 549KB
11-05-2021 Overview – Expense Allocation/Apportionment in Calculation of the IRC 904 FTC LimitationPDF 443KB
10-26-2021 Form 1040NR Examination Adjustments in RGSPDF 508KB
10-26-2021 Examining Education Expenses Claimed by Nonresident Alien Individual EmployeesPDF 310KB


Examining a Reseller's 263A ComputationPDF


09-16-2021 Section 263A Costs for Self-Constructed AssetsPDF 299KB
09-16-2021 Limitation of Exchange Gain or Loss on Payment or Disposition of Debt InstrumentPDF 326KB
09-01-2021 FTC (Business) General PrinciplesPDF 241KB
08-20-2021 Transfers of Property to Partnerships with a Related Foreign PartnerPDF 392KB
08-20-2021 Accuracy-Related Penalty on Understatements With Respect to Reportable TransactionsPDF 301KB
08-04-2021 Penalty for Failure to Include Reportable Transaction Information with ReturnPDF 216KB
07-28-2021 Overview of IRC 987 and Branch Operations in a Foreign CurrencyPDF 356KB
07-08-2021 IRC Section 250 Deduction: Foreign-Derived Intangible Income (FDII)PDF 288KB
07-07-2021 Revised ASC 730 Directive - Computing Qualified Research ExpensePDF


06-30-2021 Allocation Methods of Personal Use of AircraftPDF 505KB
06-30-2021 Foreign Tax RedeterminationsPDF 192KB
06-17-2021 Concepts of Global Intangible Low-Taxed IncomePDF 429KB
06-10-2021 Partner's Outside BasisPDF 442KB
05-20-2021 Allocation and Apportionment of DeductionsPDF 252KB
04-05-2021 FTC Carryback and CarryoverPDF 263KB
04-02-2021 Liquidating Distributions of a Partner's Interest in a PartnershipPDF 315KB
04-02-2021 Reasonable Cause and Good FaithPDF 213KB
03-29-2021 Receipt of Dividends or Interest from a Related CFCPDF 283KB
03-23-2021 IRC 965 Transition Tax OverviewPDF 261KB
03-12-2021 Sale of a Partnership InterestPDF 526KB
02-25-2021 Producer's 263A ComputationPDF 342KB
02-12-2021 Interest Capitalization for Self-Constructed AssetsPDF 842KB
01-28-2021 LIFO RecordsPDF 230KB
01-04-2021 Qualified Dividends and Capital Gains Rate Differential AdjustmentsPDF 481KB


Date Title Size
12-18-2020 Determining Liability AllocationsPDF 176KB
12-18-2020 Recourse vs. Nonrecourse LiabilitiesPDF 236KB
12-04-2020 Modified Simplified Production MethodPDF 378KB
12-04-2020 Alternative Method for Determining Section 471 Costs for UNICAP PurposesPDF 264KB
09-30-2020 Cost Sharing Arrangements With Stock Based CompensationPDF 228KB
09-17-2020 Overall Foreign and Domestic Losses PDF 329KB
09-15-2020 Introduction to Dollar Value LIFO PDF 516KB
09-09-2020 Foreign Earned Income Exclusion - Audit Techniques PDF 218KB
08-25-2020 Foreign Earned Income for Purposes of IRC 911PDF 103KB
08-19-2020 LIFO Pooling RequirementsPDF 125KB
08-19-2020 Taxability of Distributions Not From Accumulated Earnings & ProfitsPDF 255KB
08-13-2020 Computation and Review of IRC 986(c) Gain or Loss -Pre-TCJAPDF 226KB
07-17-2020 FTC Limitation and ComputationPDF 70KB
07-14-2020 Distributions with Accumulated Earnings & ProfitsPDF 479KB
07-14-2020 General Overview of Distributions and Accumulated Earnings & ProfitsPDF 321KB
07-14-2020 Property DistributionPDF 395KB
07-14-2020 Adopting LIFOPDF 94KB
07-14-2020 LIFO Conformity for U.S. Corporations with Foreign Subsidiaries Using LIFOPDF 93KB
07-14-2020 LIFO ConformityPDF 60KB
05-26-2020 Taxation on the Disposition of USRPI by Foreign PersonsPDF 282KB
05-08-2020 IRC 481(a) Adjustments for IRC 263A Accounting Method ChangesPDF 297KB
05-08-2020 Foreign Earned Income Exclusion AdjustmentPDF 72KB
05-08-2020 Overview of IRC 986(c) Gain or Loss Prior to Tax Cuts and Jobs Act of 2017PDF 167KB
05-08-2020 Official Versus Free Market Exchange RatePDF 88KB
04-28-2020 Installment MethodPDF 159KB
04-28-2020 Substantiation RequirementsPDF 86KB
04-28-2020 Foreign Currency TranslationPDF 166KB
04-10-2020 Overview of Statute of Limitations on the Assessment of TaxPDF 131KB
04-07-2020 Adjustments for Overwithholding on Form 1042PDF 2637KB
03-10-2020 How to Compute the AMT FTCPDF 108KB
01-28-2020 Overview of the Enhanced Oil Recovery Tax CreditPDF 362KB
01-22-2020 FDAP Payments -Statistical Sampling and Projection ProceduresPDF 238KB